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Another Judge Says There's No Trademark Violation In Selling Ads On Trademarked Keywords

from the understanding-trademark-law dept

Fri, Sep 29th 2006 7:48pm — Mike Masnick

It seems that companies never stop suing over this particular issue. Despite numerous cases before it, including from Geico and American Blinds, yet another company has sued Google because the company's competitors bought ads on the keyword of their company name, Rescuecom. Of course, this should not be a violation of trademark law. Trademark law is mostly about avoiding confusion for the sake of consumer protection. It's not about giving the trademark owner full rights over the trademark (similar to copyrights or patents). There is also the secondary issue, over whether this is even a Google issue. If it were a trademark violation, then it should be on the company who bought the ad, not Google, who is simply acting as the platform.

The good news is that in this case, the judge has come out and said clearly that there is no trademark violation in selling ads on trademarked keywords. Unlike in some of the other cases, the judge didn't punt on the issue and very clearly said there is no trademark issue here. Of course, Rescuecom is not happy with the decision and will probably appeal. It has made a statement on the matter that is worth quoting just for the level of hyperbole: "A dangerous precedent has been set that allows a behemoth to pit smaller competitors against one another, while it rakes in the additional revenue. The immense power enjoyed by Google will be compounded by this ugly tactic as advertisers clamor to reach critical online audiences. Rescuecom will not be the last company hurt by this scheme." Of course, much of that statement is wrong. This really is no different than earlier cases, and it is consistent with the purpose of trademark law. It has nothing to do with allowing a behemoth to do anything, and whether or not Google makes money has no real bearing on whether it's a problem for Rescuecom. Furthermore, it's not clear how Rescuecom is "hurt" by this. If it's true that they're hurt by someone else's ad, then it would seem that any competitor's advertisement is hurting them as well -- but last we checked, advertising against your competitors is perfectly legal. Update: Lawyer Eric Goldman has a great summary of the details in the decision. As noted here, unlike previous cases, this judge didn't punt on the issue, but clearly said that search engines selling ads on trademarks are not violating trademark law. However, the News.com article was a little confusing, and may have missed the bigger point. In this case, the judge was more focused on that "second" issue I described above: Google's liability. That's what the decision was based on, saying that a search engine selling keywords is not "using the trademark in commerce" and therefore there's no misuse. So, the decision is a big deal, because it highlights that search engines selling ads on trademarks are not actually using the mark in commerce, and therefore, not liable for its misuse (though, the advertisers who buy the ads still could be, depending on how it's used). Update 2: It turns out that the company thought this lawsuit would make for a good publicity stunt. Nice of them to abuse the legal systems for the sake of PR.

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17 Comments

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ulle, 29 Sep 2006 @ 9:56pm

trademarks
sooooo, your company is not making money liked you thought it would,,, what to do,,, heck sue someone like google after all it can not be your companys fault it is doing terrible, it has to someone elses fault
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Steve E, 30 Sep 2006 @ 3:19am

This has confused me a little. I thought Google didn't allow anyone but the trademark owners to bid on brand terms (company names etc).

Does this mean if I owned an online store selling holidays I could bid on the keyword Expedia on Adwords or not??
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Me, 30 Sep 2006 @ 3:27am

Bummer
I use adwords , and at some point I wanted to promote an Ipod related product , and in order to describe the product , I could not use the word Ipod .
I just couldn't use the word , in any context . Google forbids using the term Ipod for describing related products ..
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Jimmy Bear Pearson, 30 Sep 2006 @ 6:17am

Re: Steve
IANAL, but yes, that seems to be the idea behind the judgement.
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Scott Lawton, 30 Sep 2006 @ 9:18am

the issue seems more complex
I'm NOT an expert on this issue, and at first glance I'm in favor of allowing ads against TMs (pending a definitive legal analysis). But, a bit of research suggests that you may not be reporting the past cases accurately. For example, the Tech & Law blog says "based on the four on-point precedents that all went against search engines, I would have predicted a Google loss", Read the whole post at http://blog.ericgoldman.org/archives/2006/09/google_wins_key.htm -- there are further interesting details. I don't know whether Goldman is correct, but he seems like a credible source. (The usual disclaimers: I don't know him, am not involved in the case, etc.)
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Mike (profile), 30 Sep 2006 @ 10:39am

Re: the issue seems more complex
I'm NOT an expert on this issue, and at first glance I'm in favor of allowing ads against TMs (pending a definitive legal analysis). But, a bit of research suggests that you may not be reporting the past cases accurately.

Scott, that's a good link (and I've added it to the story above). I think part of the confusion was in the way that the News.com article reports the story, so I apologize. However, I don't think it really disagrees with what I'm saying -- though perhaps to a degree it does. It's true that in the previous cases the judges basically punted on the liability issue -- so I'm not sure it was that obvious that a judge would side against Google. However, what the Goldman post does do is show that the case was focused more on the overall liability of search engines, rather than the question of confusion -- and that's a useful precedent to set.

I do think that this decision is very much in line with how trademark law is supposed to be used, however.
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Ryan, 30 Sep 2006 @ 12:34pm

How is this still a good thing?

My company for example.. if you type in our URL.. 3 ads show up above it with the title of nothing but our URL..

when you go to the site, they again use our terms on teh site.

As a visitor, I'd actually believe that the other site is our URL....

If I opened up a resaturant in the real world, and called it McDonalds... and advertised it as McDonalds, I'd be sued.

How come I'm not liable online?
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Mike (profile), 30 Sep 2006 @ 12:59pm

Re:
My company for example.. if you type in our URL.. 3 ads show up above it with the title of nothing but our URL..

when you go to the site, they again use our terms on teh site.

That's a different situation. If the ads are confusing, then it is a trademark violation... but only for those taking out the ads.

You have to separate out a few issues. Is it a violation to simply advertise when people are looking for your competitors? No.

Is it a violation to make ads that will confuse people into believing your site is a competitor's? Yes.

Is it Google's fault if someone makes an ad that will confuse people into believing your site is a competitor's? No.

So, in your case, there was confusion, so the company who took out the ad is probably violating your trademark (assuming you have a trademark on it). However, Google is not violating it. At the same time, if someone had an ad that wasn't confusing people, but simply pointed to the competition, that's perfectly legal. It's called competing.
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Jo Mamma, 1 Oct 2006 @ 1:16am

A bit off topic, but...
You know, reading this article reminded me of the now age old struggle between nissan motors and nissan computer.

Basically, this (presumably) small business person with the last name of Nissan registered nissan.com in the early 90's (very smart)... and when Nissan motors finally woke up to the dot.com era, they decided to try and force him out of business by suing him for the domain name... and they've been suing him ever since (can you say evil?). I can't believe this guy has the resources to go against a major corporate legal offensive for this long.

I saw this years ago and marveled at how badly this Nissan guy is getting screwed by Nissan motors... and they're still trying to get the domain name from him! Amazing.

Well, ok I guess this was totally offtopic, but checkout nissan.com... I find it interesting. And I wish him the best of luck. Hopefully, he'll have his legal fees returned and maybe even end up selling the name when he retires.
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biotunnel, 1 Oct 2006 @ 6:38am

Re: A bit off topic, but...
big companies have resources ... they have hired legal companies to fight each case with you ... it is not hard for them to battle with some guyfor 10 years ... Nissan Motors will probably never stop ...(until they really get the domain)
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Skeptical, 1 Oct 2006 @ 11:08am

Hard to believe
I don't see what the problem is here.
If a company is afraid of competetion then they are in the wrong buisness... maybe people should rely more on service and quality rather than suing everyone else that is (possibly) better than them.
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rcanderson, 1 Oct 2006 @ 4:04pm

stupid area 51
Auroa is just the beginning.
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craig, 1 Oct 2006 @ 9:59pm

If I opened up a resaturant in the real world, and called it McDonalds... and advertised it as McDonalds, I'd be sued.

This is not the same thing. This is more like opening a restaurant called "Rusty's Burger Bin."
You then bid on the adword for McDonald's, and win, so now when someone types McDonald's into Google, up comes your ad which says "Come to Rusty's Burger Bin - We Bet You'll Love Our Burgers Better!"

Not a trademark violation. And no way does Mcdonald's owning a trademark on its name mean that Google has to prevent any competitor's site coming up in its search results, even if they are paid ad search results.
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Nick Iler, 2 Oct 2006 @ 12:52am

Hell - I'll start a company suing other companies!
Do I have any investors? I think this is going to do it. Oh, dammit! I forgot to get a patent.
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RantMax, 2 Oct 2006 @ 6:27am

Jesus f... Christ!!!
Mike, dude, damn it.. !

"Trademark law is mostly about avoiding confusion for the sake of consumer protection. It's not about giving the trademark owner full rights over the trademark (similar to copyrights or patents)."

Aren't you sick in pasting this in EVERY SINGLE ARTICLE even remotely related to trademarks in some way?

We get it, all right? I lose actual brain cells when I see you repeat the same 4-5 phrases in every post of yours.

And I do *NOT* want to lose brain cells. Who would want to?
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mahmoud braim, 26 Mar 2010 @ 5:31am

lobying
is there a lobbying force for the common citezens to affect & interfer in the future of telecommunications and whatever results from semiconductor technology & other technology?

Mind you theis idea and endevour could acquire amounts of money for whoever initiate and continue especily in democracy environement

if this is bullshit, at least explain such issues in every language
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